by Robert Hyder
As mortgage interest rates continue to hover near historic lows, mortgage applications for both purchases and refinances continue to increase. When housing prices reached their peak in 2005, the housing crisis was not far behind. Increased foreclosure rates in 2006 and 2007 led to an all-out housing crisis by August 2008, prompting then Secretary of Treasury Henry Paulson to say the housing crisis is “the most significant risk to our economy.”
Several weeks after President Obama revealed the Homeowner Affordability and Stability Plan, the nation’s strongest tactic to aid homeowners since the crisis began, coupled with near record-low mortgage rates, and the demand for mortgage applications has increased significantly. For the week ending March 6, the Mortgage Bankers Association said their seasonally adjusted index of mortgage applications increased by an astounding 11.3%, just in time for spring, the high-point of the year for home buying.
In an effort to spur an increase in mortgage applications, Obama’s plan is intended to provide much-needed assistance for quality borrowers wishing to refinance and to stimulate the homebuying process, in addition to allieviating the foreclosure rate.
Many experts believe the current mortgage rates are at such attractive levels that the increase in mortgage applications may continue to climb for several more months. The significance of low mortgage rates combined with the increased volume of mortgage applications is a decent indicator that the housing delema is beginning to recover.
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